Bitcoin and Ethereum Face Key Test as CPI, ECB Decisions Loom

Bitcoin (BTC) and Ethereum (ETH) prices are under pressure as investors brace for key inflation data and central bank decisions. Bitcoin fell 1.75% to $79,599 on September 5, while Ethereum dropped 2.45% to $2,455.

Crypto market sentiment weakened after the latest U.S. nonfarm payrolls report showed 162,000 jobs were added in August, strengthening expectations that the Federal Reserve could raise interest rates at its September 16 FOMC meeting. Prediction markets currently show a 50% probability of a 25-basis-point hike and a 50% chance that rates remain unchanged.

Attention is now shifting to the U.S. CPI report due September 11, with economists expecting inflation to remain at 3.4%. Meanwhile, markets are pricing in a 25-basis-point European Central Bank rate hike on September 10. Hawkish monetary policy could weigh further on Bitcoin and Ethereum as higher rates typically reduce demand for risk assets.

Despite these concerns, institutional crypto demand remains resilient. Bitcoin spot ETFs recorded $174 million in inflows on September 4, while Ethereum ETFs attracted $26 million, according to SoSoValue.

Bitcoin has slipped below the key $80,000 psychological level as short-term holders increase selling. CryptoQuant data shows these investors have transferred 467,000 BTC, worth approximately $35.4 billion, to exchanges since August 17. Daily exchange transfers have averaged 27,500 BTC, about 29% above the previous three-month average.

Technical indicators suggest Bitcoin could decline toward the lower Bollinger Band near $75,335 if selling pressure continues. However, BTC has continued forming higher highs despite increased profit-taking, indicating that market demand is absorbing some of the supply.

Ethereum, meanwhile, is testing its 200-week EMA around $2,455 after failing to close above the level for three consecutive weeks. A confirmed breakout could strengthen the long-term bullish outlook.

ETH also faces resistance at $2,555. Breaking above this level could trigger further gains, while another rejection may send Ethereum toward $2,215 support. With the RSI at 58, momentum currently remains moderately favorable for ETH bulls.